Northvolt files for reorganization in the US
As a result, business will continue as usual and the company will fulfil its obligations to customers, suppliers and employees.
The reorganization under the Chapter 11 process means that the company will have access to USD 145 million (SEK 1.6 billion) from a security package and USD 100 million (SEK 1.1 billion) in loans from Scania, one of Northvolt's largest customers.
The process will allow the company to restructure its debt, align its business with current customer needs and secure a sustainable foundation for continued operations.
The Chapter 11 process applies to Northvolt Ett, the battery factory in Skellefteå, and Northvolt Labs in Västerås. Its commencement now means that employees will receive their salaries as usual next week.
“This decisive step will allow Northvolt to continue its mission to establish a homegrown, European industrial base for battery production. Despite near-term challenges, this action to strengthen our capital structure will allow us to capture the continued market demand for vehicle electrification. We are likewise pleased by the strong support we have received from our existing lenders and our customers,” said Tom Johnstone, Interim Chairman of Northvolt.
Northvolt Germany and Northvolt North America, subsidiaries of Northvolt AB with projects in Germany and Canada, are financed separately and are not part of the Chapter 11 process. They will continue to operate as usual.
The filing for reorganization in the US means that Northvolt avoids the threat of bankruptcy. In recent weeks, the situation has become increasingly critical for Northvolt. It has failed to raise new capital and it has major problems in battery production, which is still at a low level, far behind schedule. Earlier this week, it was announced that Northvolt's CEO Peter Carlsson is stepping down as chairman of the subsidiary Northvolt Ett, to be replaced by Paul O'Donnell, an Irishman with extensive experience of working for companies with financial problems.
Lennart Håkansson
editor@northswedenbusiness.com
